Fed Vice Chairman Plans To Step Aside

Federal Reserve Vice Chairman Alan Blinder, making what he termed an “extremely difficult career choice,” said Wednesday he would not seek reappointment to the Federal Reserve and would instead leave the central bank at the end of the month.

His departure means that President Clinton is now faced with filling three spots on the seven-member board although analysts said it was a virtual certainty that Federal Reserve Chairman Alan Greenspan will be reappointed to a third term.

Greenspan was first appointed Fed chairman in 1987 by President Reagan and reappointed by George Bush. His four-year term expires in March.

While Clinton last week insisted that he had made no decision on the Fed chairmanship, financial analysts widely believe Greenspan will be reappointed, especially in light of the fact that any nominee must clear the Republican-controlled Senate.

Before the Republicans gained a Senate majority in the 1994 elections, there was speculation that Blinder, a highly respected economist who had served on Clinton’s Council of Economic Advisers, might succeed Greenspan.

But Blinder’s more liberal views on interest rates and the need to promote job growth were not always welcomed by Republicans, who generally side with the view of financial markets that the No. 1 job of the central bank is to fight inflation.